I'm currently putting together a short commentary piece for CUF looking at the question of how New York City should spend its approximately $70 million in workforce dollars from the federal American Recovery and Reinvestment Act (ARRA). This is a big chunk of change: the city's entire allotment under the Workforce Investment Act (WIA) for FY2008 was only $66.4 million. So effectively we're getting an extra year of funding with a use-it-or-lose-it proviso attached: my understanding is that the money has to be spent by June 30, 2010. The city is likely to get an even bigger infusion of money to support public assistance programs under Temporary Assistance for Needy Families (TANF); there's a good deal of overlap in the clientele for WIA and TANF, and they do some of the same things, but for reasons probably not worth going into it's preferable for me to focus on WIA in the piece I'm writing.
The problem in both cases though is that TANF, which was signed into law in 1996, and WIA, which passed in 1998, both emphasize short-term attachment to the labor force--or in plain English, getting a job ASAP. Rather than pile on another layer of bureaucracy, the Obama administration and Congress have determined that ARRA money should flow through existing channels--so the money has to follow the rules of those two programs and is bound by their limitations. And this presents a pretty serious problem: if the programs are designed to put people into jobs quickly, and contracts with service providers are predicated upon the providers' ability to make those job placements, what happens when there simply aren't jobs into which people can be placed?
What I think should happen, and what I imagine I'll write about when this thing comes out, is that we expand the definition of a successful program outcome to reflect current labor market realities. I heard from a colleague earlier this afternoon that even Ron Haskins, the conservative scholar now in residence at Brookings who helped author TANF in the mid-1990s, now believes that public assistance recipients should be eligible for more job training than the program facilitates. (A Google search failed to yield any written evidence of this, so I'm taking it on the credibility of my source.) In both TANF and WIA, that might mean more adult education and a recognition that if an individual advances from a fifth-grade reading level to a ninth-grade reading level, it might not help her get a job today but it very likely will in two years, all else being equal. Under WIA, that could entail expanding the time horizon for training, either through the individual training vouchers now available to customers of the system or by setting up something like the No Worker Left Behind program now running in Michigan, which would amount to helping facilitate community college enrollment.
As much of a political bugaboo as this might be, I'm going to invoke Europe: when the economies of the Continent tip into recession, the common practice is that people there head back to school--waiting out the lousy job market while adding skills to boost employability and earning power later on. We should embrace that approach here as well. Indeed, David Leonhardt notes in today's New York Times that we've done this before:
[T]he third factor — education — is the most important of all. It can make the pie larger and divide it more evenly.
That was the legacy of the great surge in school enrollment during the Great Depression. Teenagers who once would have dropped out to do factory work instead stayed in high school, notes Claudia Goldin, an economist who recently wrote a history of education with Mr. Katz.
In the manufacturing-heavy mid-Atlantic states, the high school graduation rate was just above 20 percent in the late 1920s. By 1940, it was almost 60 percent. These graduates then became the skilled workers and teachers who helped build the great post-World War II American economy.
Allowing programs such as WIA and TANF to more robustly support educational attainment while the economy continues to shed jobs would represent not a retreat from the "work-first" principles that informed TANF and WIA (putting aside for the moment the ongoing doubt on the part of liberals that work-first is such a good idea; another argument for another day, hopefully when there's actually some work to make it a non-academic discussion), but an investment in participants who will be able to command higher-value work when job growth resumes.